More than three years after a pro-U.S. government was installed, Afghanistan has been unable to contain opium poppy production and is "on the verge of becoming a narcotics state," according to a presidential report.

The report said the area in Afghanistan devoted to poppy cultivation last year set a new record of 206,700 hectares, more than triple the figure for 2003.

The Afghan narcotics situation, "represents an enormous threat to world stability, said the report, issued Friday.

It listed opium production at 4,950 metric tons, 17 times more than second place Myanmar.

Look at that report and it says that 40 to 60% of Afghanistan's GDP is attributed to narcotics. The situation really sounds disastrous:

In many provinces there also are opium markets, under effective protection of regional strongmen, where opium is traded freely to the highest bidder and is subject to taxation by those strongmen. An increasingly large portion of Afghanistan’s raw opium crop is processed into heroin and morphine base by drug labs inside Afghanistan, reducing its bulk by a factor of 10 to 1, and thereby facilitating its movement to markets in Europe, Asia and the Middle East through Iran, Pakistan, and Central Asia. In the South, Southeast and Northeast border regions, Pakistani nationals play a very prominent role in all aspects of the drug trade. Distribution networks are frequently organized along regional and ethnic lines (i.e., Baloch tribesmen on both sides of Afghanistan’s borders with Iran and Pakistan, and the Tajiks in northern Badakhshan Province).

The report discusses some multilateral efforts to control the drug flow, as well as new US policy initiatives...

But 40 to 60% of Afghanistan's GDP? It would take incredible resources to counter that. According to the CIA World Factbook, the GDP is $20 billion (2003, purchasing power parity). If $8 to 12 billion is drugs, then $1 billion/year in external aid seems kind of small.